Middle income trap
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Middle income trap

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Middle income trap Middle income trap Presentation Transcript

  • 1.MOHD ARIF
    2.BUSHRA ZAHIR KHAN
    3.ARTI YADAV
    4.ARMAN ALI
    5.ARUNIMA SHARMA
    6.DIMPLE KUMARI
    7.JYOTSNA
    MIDDLE INCOME TRAP
  • WHAT’S THE INDIA STORY
  • Rising GDP growth
    % average annual GDP growth
    1900 – 1950 1.0
    1950 – 1980 3.5
    1980 – 2002 6.0
    2002 – 2006 8.0
    Sources: 1900-1990: Angus Madison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001), 2000-2005 Finance Ministry
  • Population growth is slowing
    % average annual growth
    1901 – 1950 1.0
    1951 – 1980 2.2
    1981 – 1990 2.1
    1991 – 2000 1.8
    2001 – 2010 1.5
    Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001)
  • Literacy is rising
    %
    1950 17
    1990 52
    2000 65
    2010 (proj) 80
    Source: Census of India (2001)
  • Productivity is rising
    30% to 40% of GDP growth is due to
    rising productivity
  • Middle class is exploding
    % Million
    People
    1980 8 65
    2000 22 220
    2010 (proj) 32 368
    Source: The Consuming Class, National Council of Applied Economic Research, 2002
  • WHAT IS A MIDDLE INCOME TRAP
    Countries stagnating and not growing to advanced country levels
  • INCOME AND CONSUMPTION TRRNDS
  • Figure 1. Changes in income share by economic class
  • Figure 2. Growth in inflation-adjusted family income
  • Figure 3. Inflation-adjusted median family income
  • Figure 5. Annual hours of work in married families, 1979 & 2000
  • priorities for becoming a determined marathoner
  • Enormous challenge of managing threesimultaneous transformations
  • “Managing three transformations simultaneously will be an enormous challenge. To do so, India must anticipate and adapt to the changes wrought by each of these transformations individually and collectively
  • THREE DIMENTIONS TO GROWTH
    • Society—moving from a poor society to a
    cohesive affluent society
    • Economy—moving from a domestically oriented
    to a globally competitive economy
    • World—moving from a small player to a responsible
    global citizen
  • “India’s long-term prospects and growth will depend on its ability to balance all three dimensions—society, economy and global citizenship—as it makes policy decisions
  • Overarching issues of governance
  • facets of governance must change to transform the Indian economy and society:
  • Create a smarter, more focused, agile and more credible government.
    Retool the civil service to meet the needs of today and tomorrow.
  • Focus on the long term and open the public private dialogue.
    Support competitive markets and prevent capture of state organs.
  • Inculcate a code of self-discipline and ethical behavior within the business community.
    Reverse the deterioration in political governance.
  • Implement priorities, monitor results, ensure
    transparency and enforce accountability.
  • “A refocused government is essential to facilitating dramatic transformations in the Indian economy and society. There is a need to rethink not only what the government does but also how it does it
  • intergenerational issues requiring an immediate start
  • Tackle disparities and achieve inclusive growth.
    Dramatically improve the quality of the environment.
  • Eliminate infrastructure bottlenecks—Create a competitive edge.
    Improve the delivery of public services—Create
    functioning cities for sustaining growth.
  • Renew the focus on education, technological
    development and innovation—Keys to sustaining
    improvements in competitiveness.
    Launch a revolution in energy—Ensure security and competitiveness.
  • Foster a prosperous South Asia and become a responsible global citizen—India, its neighborhood
    and the world.
  • THE END